Has the US gone communist yet? It's hard to tell.

[Cyrus]

Some brief points:

- The profits from exploration come from the rise in the price of crude combined with the fact that extraction costs have remained relatively steady. (But the variance is a killer, baby!)

- The profits from refining, for the main part, come from the increase in the price of inventories due to, again, the rising prices of oil products. You buy youre crude on April 1st at $60 per barrel and the products that come out of that barrel will net you $100 (I'm just saying). Then you refine that crude and by the time the refined products are ready, crude oil has gone up and so have its products: your basket now sells for $110.

- Don't ask abt retail margins. (I said, don't ask!)

- Important-but-not-by-any-means-secret-information-offered-on-a-poker-website: Some three gigantic refineries (the term is exact) are being built in the Middle East. More will be probably coming off the blueprints soon. (Yes, one more incentive for peace in the region!) The smaller of them I hear is gonna be going at some 500,000 barrels per day. These will come on stream after some 3-5 years. When that happens, our friendly oil producing countries are not just gonna be selling us westerners crude oil, they be selling us the gasoline! (The West is not too keen on refineries. Too dirty, too costly, too bothersome. We gonna pay up for that.) So look for some easing of prices near that time horizon -- earlier if the region's "political news" turn to the better.

Can't turn to the worse much...